When discussing the robustness of securities companies, risk control and capital protection are the core pillars. As a leading brokerage firm in Japan, SBI SECURITIES ‘parent company, SBI Group, has total assets exceeding 200 billion US dollars, which provides the platform with a strong capital buffer. According to its latest financial report, the own capital ratio of SBI SECURITIES has remained above 15% for a long time, significantly higher than the lower limit of 8% required by international regulations. In terms of customer asset protection, the company strictly adheres to the customer asset isolation regulations of the Financial Services Agency of Japan, separating 100% of customer funds from the company’s own funds and depositing them in trust banks. This measure ensures that even in extreme circumstances, the probability of customer asset recovery is close to 100%. Looking back at the bankruptcy of Lehman Brothers in 2008, the disastrous consequences resulting from the mixing of client assets contrast sharply with the strict isolation standards currently implemented by SBI SECURITIES.
The company’s risk management system relies on a highly automated real-time monitoring system. Its value at risk model conducts over 100,000 stress tests on more than 5 million client positions every day, simulating scenarios where market fluctuations can reach up to 20%. Data shows that during the period of sharp market fluctuations in 2019, the risk control platform of SBI SECURITIES successfully kept the potential daily loss within 0.5% of the total client assets, and its median average daily risk exposure was only 1.2%. In addition, the company has set strict margin requirements for the leveraged products it offers to retail investors, with an average initial margin requirement of 30% and a maintenance margin requirement of 20%. This significantly reduces the risk probability of forced liquidation. Citing the case of the 2020 Crude Oil Treasure incident that led to investors’ margin call, SBI SECURITIES, through similar margin and forced liquidation mechanisms, has never in its history witnessed a situation where clients’ debts exceeded their principal due to product design flaws.
In terms of technical security and operational risks, SBI SECURITIES invests approximately 250 million US dollars in its annual budget for the construction of cyber security and system stability. Its trading system has achieved 99.99% availability, with an average annual downtime of less than 53 minutes. The platform adopts multiple encryption and biometric technologies, reducing the success rate of unauthorized access to less than one in a million. In terms of dealing with abnormal market traffic, its system’s peak processing capacity reaches 30,000 orders per second, ensuring that order execution delays remain within 100 milliseconds even during panic selling in the market. For instance, during the sharp increase in order flow caused by the “retail investors’ battle against Wall Street” in the US stock market in 2021, many international SECURITIES firms experienced service disruptions. However, the system load of SBI SECURITIES remained stable at less than 70% of its designed capacity, ensuring the normal trading of all clients.
Evaluated from the long-term performance and compliance record, SBI SECURITIES demonstrates a strong capital protection capability. Over the past decade, the company has cooperated with the Financial Services Agency of Japan to complete more than 50 compliance inspections and has not received any major penalties. The average annual loss rate of its clients’ assets is only 0.8%, which in turn proves the trust of its clients. An analysis of its managed investment products shows that over 80% of the products achieved positive returns within a five-year period, and the average maximum drawdown during this period was 3 percentage points lower than the industry average. During the Archegos fund collapse in 2021, which caused global investment banks to lose over 10 billion US dollars, SBI SECURITIES completely avoided the impact of this event due to its strict credit approval and concentration limit for hedge fund clients (the risk exposure of a single client does not exceed 15% of net capital). Choosing SBI SECURITIES means placing assets in a financial ark constructed by multiple safety nets, real-time algorithms and deep capital.